Tag: Outsourcing

Ford Announces $1.6 Billion Investment in Mexico

Ford announces $1.6 billion investment in Mexico, derided by Trump
A Ford logo is pictured at a store of the automaker, in Mexico City, Mexico, April 5, 2016. REUTERS/Edgard Garrido

DETROIT/WASHINGTON/MEXICO CITY (Reuters) – Ford Motor Co (F.N) on Tuesday announced it would invest $1.6 billion to build more small cars in Mexico, starting in 2018, triggering a fresh blast of criticism from Republican front-runner Donald Trump. Continue reading “Ford Announces $1.6 Billion Investment in Mexico”

Honest Co. Faces Big Questions After Lawsuits

03-14-16 Honest
Honest Co. headquarters in Santa Monica. The company, launched five years ago, pledged to “build a culture of honesty.” (Emily Berl)

When Honest Co. launched five years ago, the Santa Monica firm targeted a market uncommon among start-ups: diapers. Continue reading “Honest Co. Faces Big Questions After Lawsuits”

Nabisco to Cut Chicago jobs, Send Some Work to Mexico

 

Nabisco to Cut Chicago jobs, Send Some Work to Mexico

Mondelez International (Nabisco) will lay off half of its 1,200 employees in its bakery on Chicago’s Southwest Side after deciding to make a major investment in a Mexico plant rather than its long-standing facility here. Continue reading “Nabisco to Cut Chicago jobs, Send Some Work to Mexico”

Made in the U.S.A. Bucking a 30-year Trend

Jeremy Quittner | Inc.com

For Lumitec, a lighting product company in Delray Beach, Florida, manufacturing in the U.S. is essential, but so is exporting to clients overseas.

Lumitec’s products, which are designed for extreme environments, require exact specifications that need frequent product monitoring. So the lag time to make changes typically associated with manufacturing thousands of miles away in China is not an option. To accommodate these needs, Lumitec’s headquarters are in a 10,000-square foot facility that can handle the customization and assembly that clients require.

Lumitec is like an increasing number of small companies that are manufacturing in the United States, and bucking a 30-year trend of outsourcing such production overseas.

These companies find increased control, quality, and production standards domestically that may cancel out the cost savings that could come with manufacturing overseas. They are also turning the table on recent history in other ways, by exploiting sales in international markets, and uncovering opportunities by selling their goods to other countries in addition to domestically. They find the ‘Made in the U.S.A.’ stamp brings them unexpected cachet.

“We attend trade shows outside of the U.S. and people are always pleasantly surprised that we manufacture in the U.S.,” says John Kujawa, chief executive of Lumitec, which exports its lighting products to more than 30 countries. “it is understood that many products manufactured in the U.S. are greater quality than those from certain other countries.”

John Kujawa founded Delray Beach, FL – based Lumitec Inc.

Manufacturing businesses have added 500,000 jobs in the United States since 2009, though the sector has a lot of ground to make up, having lost 2.3 million jobs since the start of the recession. States that led the way were Michigan, Ohio, Indiana, Texas, and Illinois, which combined added a quarter of a million of those jobs over the same period.

Continue reading “Made in the U.S.A. Bucking a 30-year Trend”

Made in USA (Again): Why Manufacturing Is Coming Home

Eric Markowitz | Inc.com staff

Mismanaged supply chain decisions sent manufacturing overseas. But the industry has changed direction.

Returning to America: Zentech Manufacturing, a contract manufacturer based in Baltimore, is seeing more and more companies return their manufacturing to America.

When Anton Bakker launched his company, Offsite Networks, in 1999, he had no intention of manufacturing overseas. But a few years later, when his company began taking on larger orders, he began looking for cheaper supply alternatives.

That’s when he went to China.

By the early 2000s, Chinese contract manufacturers had become increasingly equipped to handle the type of advanced manufacturing that Offsite was producing—point-of-sale hardware for store loyalty programs, like high-tech printers and scanners. So in 2004, the company, which is based in Norfolk, Virgnia, canceled contracts with domestic suppliers and moved 90 percent of its manufacturing to suppliers based in China, Malaysia, and Tokyo. For the most part, Bakker was satisfied.

“The scale drove us to look for more competitive, cost-effective products,” Bakker says. “I had a difficult time doing that domestically. We found that the products were just not competitive in terms of pricing, and we could find them at less than half the price overseas.”

That narrative—of outsourcing, offshoring, and finding cheaper suppliers overseas—is not a new story.

But then something unexpected happened. In 2011, Offsite Networks moved their manufacturing back to America, finding a domestic supplier, Zentech Manufacturing, based in Baltimore, to carry out the company’s orders.

So what changed?

Bakker tells me the company returned for a variety of reasons. It was becoming more affordable to manufacture locally, he says, and American technology had improved rapidly. This meant that labor costs, which had initially driven Bakker to find cheap work overseas, were a smaller percentage of total costs. Meanwhile, an increase in other costs—like shipping, for instance—had increased. In other words, it was cheaper to manufacture locally.

Continue reading “Made in USA (Again): Why Manufacturing Is Coming Home”

What Does the Future Hold for American Manufacturing?

The state of US manufacturing is likely to become a major campaign issue - Getty Images
The state of US manufacturing is likely to become a major campaign issue - Getty Images

Written by: BBC North America editor, Mark Mardell 

Drew Greenblatt is an enthusiast: proud of his company, Marlin Steel, and proud of the factory floor packed with state-of-the-art equipment.

I watch, fascinated, as a little white robot squeezes out a wire, putting kinks and bends in it as it emerges.

Then it hands it over to a slightly larger yellow robot, which holds it steady for a twist in the end before turning it over for another twist at the other end.

Oddly, I find this cutting-edge equipment rather cute and cartoonish.

The question is whether this endearing duo are merely the remnants of America’s industrial past or the sort of equipment that will make the USA world-beaters once again.

The factory floor space at Marlin Steel is being doubled and there is no doubt the company is doing well, prospering even, during the bad years. Continue reading “What Does the Future Hold for American Manufacturing?”